On May 5, 2022 Arbutus Biopharma Corporation (Nasdaq: ABUS), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop novel therapeutics that target specific viral diseases, reported its first quarter 2022 financial results and provides pipeline updates (Press release, Arbutus Biopharma, MAY 5, 2022, View Source [SID1234613678]).
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"In the first quarter of 2022, we continued to advance our efforts to develop a functional cure for hepatitis B and to develop novel treatment options for coronavirus infections, including SARS-CoV-2," said William Collier, Arbutus’ President and Chief Executive Officer. "We are on-track to achieve our goal of reporting data later this year from four clinical trials with chronically infected HBV patients being treated with either AB-729, our RNAi therapeutic, or AB-836, our next generation oral capsid inhibitor. Furthermore, our IND-enabling studies with our oral PD-L1 inhibitor, AB-101, and our oral RNA destabilizer, AB-161, are moving forward and we expect these to be completed in the second half of 2022. Additionally, we have had seven abstracts accepted at the EASL International Liver Congress, which include some of these data."
Mr. Collier continued, "With respect to our research efforts to develop a nsp5 main protease (Mpro) and nsp12 viral polymerase for SARS-CoV-2 and future coronavirus outbreaks, we are on-track to initiate IND-enabling studies for a nsp5 Mpro candidate later this year. Lead optimization activities are continuing for a nsp12 viral polymerase candidate. Financially, we are well-positioned to continue advancing all our current clinical programs through important data milestones with a projected cash runway into the second quarter of 2024."
Anticipated Milestones in 2022:
Dose first patient in the AB-729-202 Phase 2a clinical trial evaluating AB-729, in combination with VTP-300, Vaccitech plc’s (Vaccitech) therapeutic vaccine and nucleos(t)ide analogue therapy (NA), in cHBV patients in the first half of 2022.
Present new on-treatment data as well as long-term off-treatment data for cHBV patients in the AB-729-001 clinical trial at a medical conference later this year.
Report initial data from the AB-729-201 Phase 2a clinical trial evaluating AB-729 in combination with ongoing NA therapy and short courses of PEG-IFNα-2a in cHBV patients in the second half of 2022.
Report initial data from the Phase 2a clinical trial evaluating AB-729 in combination with vebicorvir (VBR), Assembly Biosciences, Inc.’s (Assembly) lead HBV core inhibitor (capsid inhibitor), and an NA in cHBV patients in the second half of 2022.
Report data set from the AB-836-001 clinical trial evaluating multiple doses of AB-836 in cHBV patients in the first half of 2022.
Complete IND-enabling studies for two oral compounds (PD-L1 inhibitor, AB-101 and RNA destabilizer, AB-161) to treat HBV in the second half of 2022.
Advance an oral compound that inhibits the SARS-CoV-2 nsp5 main protease into IND enabling studies in the second half of 2022.
Continue to explore a potential oncology indication with our oral PD-L1 program.
Financial Results
Cash, Cash Equivalents and Investments
As of March 31, 2022, the Company had cash, cash equivalents and investments in marketable securities of $221.8 million, as compared to $191.0 million as of December 31, 2021.
During the three months ended March 31, 2022, the Company received a $40.0 million (net of withholding taxes) upfront payment from Qilu Pharmaceutical Co., Ltd. ("Qilu") related to a technology transfer and license agreement for AB-729 in greater China, $15.0 million of gross proceeds from Qilu’s equity investment and $0.3 million of net proceeds from the issuance of common shares under Arbutus’s "at-the-market" offering program. These cash inflows were partially offset by $23.4 million of cash used in operations. The Company expects a net cash burn between $90 to $95 million in 2022, not including the $55 million of proceeds received from Qilu, and believes its cash runway will be sufficient to fund operations into the second quarter of 2024.
Revenue
Revenues were $12.6 million for the three months ended March 31, 2022 compared to $2.1 million for the same period in 2021. The increase of $10.5 million was due primarily to $9.6 million of revenue recognition from the Company’s license agreement with Qilu based on employee labor hours expended by the Company during the first quarter of 2022 to perform its manufacturing obligations under the license agreement.
Net Loss
For the three months ended March 31, 2022, the Company’s net loss attributable to common shares was $15.8 million, or a loss of $0.11 per basic and diluted common share, as compared to a net loss attributable to common shares of $19.6 million, or a loss of $0.21 per basic and diluted common share, for the three months ended March 31, 2021. Net loss attributable to common shares for the three months ended March 31, 2021 included $3.2 million of non-cash expense for the accrual coupon on the Company’s convertible preferred shares, which converted into 22.8 million common shares in October 2021.
Operating Expenses
Research and development expenses were $18.5 million for the three months ended March 31, 2022 compared to $13.8 million for the same period in 2021. The increase of $4.7 million was due primarily to an increase in expenses related to the Company’s multiple, ongoing AB-729 Phase 2a clinical trials, including its collaborations with Assembly and Vaccitech, an increase in expenses for its ongoing AB-836-001 clinical trial, and an increase in expenses for its early stage development programs, including AB-101 and AB-161. General and administrative expenses were $4.9 million for the three months ended March 31, 2022 compared to $3.9 million for the same period in 2021. This increase was due primarily to increases in professional fees, employee compensation and non-cash stock-based compensation expense.
Outstanding Shares
As of March 31, 2022, the Company had approximately 148.7 million common shares issued and outstanding, as well as approximately 15.7 million stock options outstanding. Roivant Sciences Ltd. owned approximately 26% of the Company’s outstanding common shares as of March 31, 2022.
COVID-19 Impact
The COVID-19 pandemic has resulted in and will likely continue to result in significant disruptions to businesses. Measures implemented around the world in attempts to slow the spread of COVID-19 have had, and will likely continue to have, a major impact on clinical development, at least in the near-term, including shortages and delays in the supply chain and prohibitions in certain countries on enrolling subjects and patients in new clinical trials. While we have been able to progress with our clinical and pre-clinical activities to date, it is not possible to predict if the COVID-19 pandemic will materially impact our plans and timelines in the future.